Razutis v. Garrett

Citation: Razutis v. Garrett Date: 19990624 1999 BCCA 410 Docket: CA024972 Registry: Vancouver COURT OF APPEAL FOR BRITISH COLUMBIA BETWEEN: ALOYZAS RAZUTIS PLAINTIFF (APPELLANT) AND: PATRICIA GARRETT DEFENDANT (RESPONDENT) Before: The Honourable Madam Justice Huddart The Honourable Mr. Justice Hall The Honourable Mr. Justice Mackenzie A. Razutis In person No one appearing for the Respondent Place and Date of Hearing Vancouver, British Columbia 28 April 1999 Place and Date of Judgment Vancouver, British Columbia 24 June 1999 Written Reasons by: The Honourable Madam Justice Huddart Concurred in by: The Honourable Mr. Justice Hall The Honourable Mr. Justice Mackenzie Reasons for Judgment of the Honourable Madam Justice Huddart: [1] This is an appeal from an order varying retroactively a consent order for child support made in divorce proceedings. The chambers judge terminated support effective 20 July 1998 and fixed the arrears under the order at $50,000.00, a reduction of about $39,000 from the arrears as calculated by the Director of the Family Maintenance Enforcement Programme. The appellant seeks an order cancelling all the arrears. He may do so only under the retroactive variation provision of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) (the "Act"). The Act does not contain a provision that applies specifically to cancellation or reduction of arrears similar to that contained in the Family Relations Act, R.S.B.C. 1996, c. 128. [2] In Shankland v. Harper, [1999] B.C.J. No. 97 (QL), I delivered oral reasons for the court dismissing an appeal from an order of a chambers judge varying a child support order retroactively. The chambers judge had applied the Child Support Guidelines (the "Guidelines") to vary support payable during a period before their implementation on 1 May 1997. Without the benefit of any authority I construed subsection 17(6.1) of the Act and subsection 2(4) of the Guidelines as obliging their application whenever a variation order is being made, reatroactively well as prospectively. I did not consider whether the effect of my reasoning was to give retrospective effect to subsection 17(6.1) by permitting a variation under the Guidelines before they came into effect. [3] Although the variation application in Shankland reached back to 1992, no argument was made based on the strong presumption against construing a statutory provision as having retrospective operation unless "such a construction is expressly or by necessary implication required by the language": (per Dickson J. (as he then was) for the majority in Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271 at 279). Even then the extent of retroactivity must be kept to the minimum required to give effect to the purpose of the legislature: Joe Moretta Investments Ltd. v. Ontario (Minister of Housing) (1992), 8 O.R. (3d) 129 at 145. [4] On this appeal, Mr. Razutis did not refer to any authorities, other than Shankland, interpreting subsection 17(6.1). However, when a provision in a Canadian statute like the Divorce Act falls to be interpreted, this court cannot ignore decisions of other Canadian appellate courts. The Alberta Court of Appeal in December 1997 refused to apply the Guidelines to the period before 1 May 1997 in MacDonald v. MacDonald (1997), 57 Alta. L.R. (3d) 195. In April 1998, in Andries v. Andries (1998), 159 D.L.R. (4th) 665 the Manitoba Court of Appeal held that an original award of retroactive lump sum child support could not be made on the basis of the Guidelines for a period before they came into effect. To do so would, it held, be contrary to the rule against retrospective operation of a statute, because: ... The Guidelines are expressed to come into force on May 1, 1997. There is nothing in them which authorizes a judge to "reach into the past and declare that the law or the rights of the parties as of an earlier date shall be taken to be something other than they were as of that earlier date", per Dickson J. in Gustavson Drilling, [supra] ... [5] The Alberta Court of Appeal adopted and applied this reasoning in Cavanaugh v. Zieglar, [1998] A.J. No. 1423 (QL). The reasoning of Twaddle J.A. in Andries is persuasive. The need for uniformity of interpretation of the Act adds its persuasive effect. The construction favoured by the Manitoba and Alberta Courts of Appeal is also that foreseen by the authors of J.G. McLeod & A.A. Mamo, Annual Review of Family Law 1998 (Toronto: Carswell, 1998) at 187: A court may vary ongoing support and cancel, reduce, or vary arrears of support. In most cases, courts are likely to decide whether to vary arrears or support accruing prior to the enactment of the Guidelines according to pre-Guideline principles and future support or arrears/support after the Guidelines were enacted according to the Guidelines. [6] The result of Mr. Justice Twaddle's reasoning accords with what, on reflection, must have been the intention of Parliament and the executive in amending the Act and implementing the Guidelines. This construction does not leave subsection 17(6.1) without a purpose. Subsection 17(6.1) requires that in addition to the court applying the Guidelines when making an original child support order it must also apply those Guidelines when varying prospectively or retroactively for periods after 1 May 1997. Thus, the inclusion of subsection 17(6.1) prevents a parent from attempting to circumvent the Guidelines by applying to vary an order, made in accordance with those Guidelines, on the formerly applicable principles. [7] Moreover, any other construction would be totally impractical, quite apart from the policy reasons underlying the rule of construction. Account may be taken, in construing a statutory provision, of unreasonable consequences, as noted in P.A. Côté, The Interpretation of Legislation in Canada, 2d ed., (Cowansville: Les Editions Yvon Blais Inc., 1991) at 115: The courts are often influenced by the consequences of different interpretations. They can determine whether the retroactive or prospective application of a statute will cause undue prejudice to individuals. There is a presumption that the legislator does not intend to be unjust. As a result, judges may refuse to apply statutes so as to produce "unjust", "unreasonable", "prejudicial", "severe", or simply "inconvenient" consequences. [Footnotes omitted] [8] This case illustrates how difficult, perhaps impossible, giving retroactive effect to section 17(6.1) could be. [9] After almost ten years of marriage the parties were divorced on 25 April 1989. The divorce order required the appellant to pay support in the amount of $450.00 monthly for each of the two children of the marriage. Darius was then 11 years old. Stefan was six. [10] On 21 September 1989, Wood J. varied an order for interim support made 5 January 1989 to provide that the appellant would pay only $200.00 per month or $6.66 per day for each child when that child was "enjoying extended access with [the appellant]". There is no explanation in the record as to why the variation applications ignored the divorce order. Nevertheless I am of the view the order of Wood J. must be taken as having varied the divorce order. [11] On 3 July 1990 Trainor J. dismissed the appellant's application to vary the order of Wood J. to "further reduce the support payable ... during periods of access." He ordered the payment of $5,754.00 on account of the arrears. He referred the issue of "what other maintenance is payable ... pursuant to the previous orders ... " to the Registrar for his recommendations. The record suggests no reference was ever held and that the appellant has been in arrears since at least that time. [12] It is not clear whether the arrears in the amount of $62,854.00 as calculated by the respondent when she registered with the Family Maintenance Enforcement Programme in March 1996 took into account reduced payments for access periods. The Record of Payments prepared by the Director for the period 25 March 1996 to 19 June 1998 does not include any deduction for periods of access to either child, although from 1 September 1997, payments due are recorded at $450.00 reflecting Darius' move from the respondent's home on his marriage. The appellant submitted the opening balance on that Record of Payments did not take account of the payment he made in compliance with the order of Mr. Justice Trainor. The evidence is persuasive that it did. [13] Firstly, the order states it was on account of arrears, the amount of which were to be determined by a reference. Neither party asked for a reference, suggesting both were satisfied with the accounting to that date upon payment of that amount. Secondly, the appellant did not prove a payment on account of the order since July 1990. The total amount required to be paid under the order from 1 August 1990 to 31 March 1996 would have been $66,600.00. Finally, the Notice of Arrears to which Mr. Razutis referred is not in the record. In these circumstances, I am not persuaded the chambers judge was wrong to have accepted the respondent's claim that the appellant owed $62,854.00 on 1 April 1996. I note that interest was not included in the account until 31 January 1997. [14] What is clear is that the appellant has made no support payments since July 1990, although he made gifts to the children occasionally and they spent some time with him in Los Angeles or Mexico. For most of the intervening years, he has lived in Los Angeles and Mexico where he has a home in which he and his sister have a beneficial interest. Since 1996 he has spent considerable periods of time on Saturna Island, where he lives with his girlfriend in a house she owns on land she shares with an unrelated person. The appellant swears he continuously sought work that would utilize his skills as a media artist during those years, without much success. The evidence is not persuasive that he has made any significant effort to obtain steady work in any other field. With few exceptions, the income he did receive is not particularized or supported by documentary evidence. [15] The respondent and children have lived, for much of the time, in social housing on social assistance. In 1994, the respondent took out a student loan and returned to school to obtain her certificate as a Special Needs Assistant. With that certificate she was able, by the time of the hearing of the application, to work on an on call basis as a home support worker for families in crisis. Darius, now 21 years old, has married and lives independently of his mother. Stefan, now 15, continues to live with his mother in Vancouver. No one can doubt that their life is not what it would have been had their father paid the support he agreed to pay. It is the respondent's intention to use any amounts she can collect on account of the arrears to assist the boys with needed dentistry work that had to be foregone during those years and with their education. She does not appeal the chambers judge's decision to terminate child support effective 20 July 1998 or to reduce the arrears by 43%. [16] The application to cancel the arrears under the consent order appears to have been triggered by the efforts of the Director of Maintenance Enforcement to enforce payment. The respondent registered with the Programme in March 1996, more or less coincident with the appellant's return to British Columbia. The appellant is of the view that the Programme's successful effort to obtain a Notice of Attachment from the Government of Canada is hindering his search for work. He says the Notice may prevent him from obtaining a Canadian passport. The Programme's efforts, he argues, may also deprive him of a British Columbia Motor Vehicle Operators Licence. There is no evidence of any such administrative enforcement procedure having been taken to this date. [17] The appellant submits the evidence established that he has had no income since 1990 from which he would have been required to make support payments under the Guidelines. Moreover, he submits he should not be penalized because poverty kept him from bringing an application to vary the divorce order when his change of circumstances would have entitled him to be free of the support obligation and thus the Notice of Attachment and the other administrative enforcement measures he fears. [18] About the application to cancel arrears, the chambers judge said: ... I think it would be unfair not to cancel the arrears to some extent, because they have been based on the order of $450 a month. On the other hand, I am not satisfied that Mr. Razutis has made any reasonable efforts at any time to satisfy the maintenance, and I am also not satisfied that he has made reasonable steps to find employment. It may be that he has not been able to find employment in the field that he would like, and I take it that that is film and video, but there are other jobs that are available, so I propose doing this. [19] She then reduced the arrears she determined to be $88,802.10 as at July 20, 1998 to $50,000.00, without explanation as to how she arrived at that amount. [20] As to both the period before 1 May 1997 and the period since the implementation of the Guidelines, the appellant submits the chambers judge erred in law when she ruled that he had not made reasonable efforts to satisfy the maintenance order or to find employment. He says on the evidence before her the only possible conclusion was that he had done both, albeit largely unsuccessfully. He further states that he has lived largely on borrowed money since 1990, all of which must be repaid, after living on inherited monies from 1987 to 1990. [21] An application to cancel arrears or to vary a child support order retroactively to reduce the amount payable under it presents a court with significant difficulties. The past must be reviewed, inevitably with the evidence coming only from the side of the parent who failed in his or her responsibility of providing a home, food, and clothing for the children, but has somehow survived. A judge, confronted with the problem created by the applicant's failure to have come to the court with evidence of changed circumstances when it was fresh, is not only entitled to give close scrutiny to subjective evidence but obliged to do so in considering whether to exercise the discretion granted the court by the Act to reduce the arrears. [22] Where a change in circumstances is proven on an application to vary, the norm is to vary the support to take account of that change from the date of the application. To vary the order for the period before the date of the application is exceptional and requires the court to have regard not only to the change of circumstances but also to "weigh the arguments for and against retroactivity and exercise his, or her, discretion accordingly." (per Prowse J.A. in T.(E.) v. T.(K.H.) (1996), 25 R.F.L. (4th) 98 (B.C.C.A.)). The evidence must be sufficiently persuasive to justify a variation that will deprive the parent who has carried the burden of the care of the children of any hope of collecting what both parents agreed was reasonable support in the circumstances as they existed when the consent order was made. [23] The principle of respect for court orders is of singular importance when a court is considering whether to vary a child support order retroactively. Vigilance is required to ensure a child's right to be supported during his years of dependency by both parents is not lightly set aside. Had the parents of Stefan and Darius stayed together, it is unlikely Mr. Razutis would have wandered the coast looking for work as a media artist while his wife and children lived on social service benefits in social housing or on Ms. Garrett's modest income. He would have done what most fathers do when they lose a job, he would have looked for and obtained whatever work he could find, however modest, to contribute to the support of his children. [24] The appellant was unemployed when the consent order was made, having resigned from the faculty of Simon Fraser University in what he recalls as unfortunate circumstances. Shortly after that order was made, he remarried. Until October 1990, he and his new wife lived on the proceeds of property inherited from his parents. The only asset remaining from that inheritance is his interest in the house he purchased in Mexico in 1988 for US $50,000.00. His interest in that house is encumbered by loans from his sister made over the years that now total US $26,800.00. There is no reliable evidence as to the fair market value of the Mexican property. Mr. Razutis says his sister refuses to permit its sale, in any event. In her affidavit she says only that her beneficial interest in the property secures the appellant's debt to her and that she refuses to lend her brother money to support his "ex-wife" by whom I understand her to mean the respondent, not the third wife. [25] The only change of circumstance that would have entitled the appellant to a review of the child support obligation he undertook in 1989 was his spending of the inheritance and his failure to obtain employment which he must have anticipated obtaining when he agreed to pay support at the time of the divorce. The appellant and his third wife separated in October 1990. By his evidence, confirmed by his sister, that wife took the last of his inherited money before leaving. He went to Mexico to live, returning to Los Angeles in 1991 to obtain a divorce and look for work. [26] It is likely that, had the appellant brought an application to vary child support in February 1991, he would have been able to establish that he could not pay any support at that time, but a court would have kept a close eye on his efforts to obtain employment. After a reasonable period of time, perhaps six to nine months, he would have been expected to search for whatever work he could find, whether in his chosen field or not. After a reasonable period of time and failing evidence that employment was impossible in any field despite his best efforts, income would have been imputed to him, with enforcement anticipated to attach his interest in his Mexican house, however difficult that might have been. This is because child support is based on earning capacity not actual income, particularly when reasonable efforts to obtain employment are not made by someone with capital assets or where the evidence suggests some undisclosed source of funds. [27] From the affidavits of the appellant and his sister, and from a copy of an affidavit of his daughter exhibited to his affidavit, it appears the appellant has lived with his sister or friends on loans from them almost continuously since February 1991, either in Los Angeles or in British Columbia, when he was not at his Mexican house. It is not easy to reconcile the evidence as to precisely where he was when. However, it is likely that in October 1993 an accident befell him, causing him serious injury. When his health improved in 1994, he moved to an apartment with the assistance of a loan from his sister. By then his debt to her totalled US $13,000.00. His daughter from his first marriage lived with him, and, after the birth of her daughter, so did his granddaughter. At some point in late 1994 he moved them to Vancouver where he met his present girlfriend. He spent the winter of 1995/1996 with that girlfriend in his Mexican house. [28] Indicative of an attitude consistent with the chambers judge's finding is a letter to his daughter written in 1996 from his Mexican home. The letter includes this paragraph: I know that I sent the second cheque (which should have gone through ok), the first was returned, and this one is definitely ok. With the extreme cold that you had plus with the fact that when we are down here (in 'resort land') sometimes the efficiency with which things get done for me up North slows down. I also sense from time to time a weird kind of 'envy' for what people assume is just hanging out in 'paradise'. (Anyways, that usually pertains to that puritan work ethic stuff where "the more you work, the more money you have, the happier you are" etc...we see a lot of them here having their 'one or two week yearly vacations' here ....) Anyways, happy birthday again you guys. (This is my money, by the way. [sic] [29] Said to be enclosed were cheques totalling $650.00 payable in various amounts to the daughter, granddaughter, Stefan, and Darius, each for a "happy birthday." Included in the letter were references to repairs to be made to the Mexican house, the hiring of someone to water the plants in his absence, and a plan to return with the boys during the summer. There was also reference to having the "patio-pool finished," a "car-port built," and "some permanent gazebo-sleeping (guest) structures built on the bluff." He was leaving money for "pila" water. He was flying to Los Angeles and then driving to Vancouver-Saturna. He had "some important video projects to do this summer." The letter appears to have been filed to help to prove that he made gifts to the children directly over the years to ensure that any money he paid went for their benefit when their mother was receiving social security benefits. It is not the letter of a person without resources or income. [30] In my view that letter is better evidence than his affidavit and those of his sister and daughter of his attitude and effort toward working to support his children. The letter from Mexico and the absence of any objective evidence to support the statements that he sought work outside his field supports the finding of the chambers judge that the appellant did not make reasonable efforts to obtain employment during those years. The lack of particulars about the income he received from 1994 to 1997 supports her conclusion that he did not make any real effort to make support payments when he did have income from various video projects over the years. [31] Further evidence of what appears to have been a consistent cavalier attitude toward the support of his children is the budget he placed before the chambers judge. That monthly budget, first presented to the Provincial Court on 8 January 1998, includes expenses for alcohol ($200), telephone ($100), and restaurant meals ($100). If in fact he is spending those amounts, he is depriving Darius of support to satisfy unnecessary personal enjoyment. It may be that his budget is not accurate; it shows a deficit, yet there is no indication of who is lending him the money to make up that deficit. The same Statement of Finances revealed an income of $10,000.00 in 1997, probably an emergency grant from the Shearwater Foundation to which he referred elsewhere in his affidavit. [32] I can see no error by the chambers judge in her appreciation of the evidence that would permit this court to interfere with the findings of fact about which Mr. Razutis complains. She made no error in principle in reaching her conclusions as to his efforts to work or to pay support for his children. [33] Considering that the appellant's spending of his inheritance and failure to obtain anticipated employment were the changes in circumstance that would have permitted a variation in child support, and that he still has an interest in the Mexican house and has made improvements to it while contributing virtually nothing to his children's support, under the law as it existed before the implementation of the Guidelines, I would not have interfered with the chambers judge's decision. The reduction she allowed compensates adequately for the support that would have accumulated for a period during which it was reasonable for him to have searched for work in his field in 1991, and during the period of his inability to work in 1993 and 1994 and a reasonable period in which to again search for steady work after his recovery from the injury causing the disability. It also makes allowance for a reduced income-earning capacity throughout the eight years from that which the appellant must have considered he had when the consent order was made in April 1989. [34] However, as Mr. Razutis submitted, the law has changed. The difficult question is whether, in the exercise of her discretion, the chambers judge took account of that change. [35] On 30 April 1997 the arrears were $76,983.97 including interest from 1 January 1997. Between 1 May 1997 and the date of the variation order, the arrears, including interest, increased by about $13,000.00. [36] The chambers judge's brief oral reasons do not distinguish between the two periods. Nor do they refer to the Guidelines. They do not tell the reader at what date she found Mr. Razutis' income, actual or imputed, to have fallen below the amount requiring the payment of child support. We can ascertain from her reasons only that she found one or more changes of circumstances to have occurred sufficient to require a reduction in the agreed child support averaging 43% over eight years, and an annual income below $6,900.00 as at 20 July 1998 when she terminated child support for Stefan, by then 15 and still dependent on his mother. [37] The record is unhelpful unless one accepts that Mr. Razutis has been a pauper from July 1990, as he swears he is and has been. The chambers judge was not persuaded; nor am I, having read the record twice in its entirety. Aside from affidavits of those from whom he has borrowed money about the amount of and reason for those loans, there is almost no evidence as to how Mr. Razutis has lived and travelled for eight years. [38] There are no applications for institutional loans, or social benefits that might have provided contemporaneous evidence of his financial position. There is no year-by-year accounting of income and expenses with bank statements. There is little of the documentation one collects over the years and is expected to put together to meet the heavy burden of proof on a parent who fails to comply with a court order or to provide contemporaneous proof of change of circumstance. [39] An appeal is from an order, not the reasons given for making it. This court presumes a chambers judge knows the law. Mr. Razutis assured us he made a full argument about the retroactive effect of the Guidelines, so she is unlikely to have ignored them. [40] On the evidence placed before her, the chambers judge undoubtedly did the best she could. Although the Guidelines suggest precision in result, that precision can be attained only where the evidence permits it. The reduction of $39,000.00 would be reasonable on the evidence even if the chambers judge notionally terminated support as at 1 May 1997. That is unlikely, however, given evidence of a gross income of $10,000.00 in 1997 and no evidence of any expenses paid to earn that income. More likely, she was persuaded Mr. Razutis had no current income or any immediate prospect of income and terminated the support for that reason. The normal order, absent an application to cancel arrears, would have been to terminate the order at the first payment date following the date of the application, in this case, as of 25 June 1998. [41] At the disclosed income of $10,000.00 for 1997, child support would have been required to be paid at $83.00 per month from May 1997 to June 1998. Thus the amount included in the reduction for the period from 1 May 1997 to 20 July 1998 would have been at most $5221.00 ($450 for June and $367.00 for 13 months). The amount remaining after the deduction of that amount suggests she made a reasonable allowance for incapacity, periods of time looking for work, and reduced earning capacity in some combination. [42] Given the record with which she had to work, I am not persuaded the chambers judge erred in the exercise of her discretion and I would dismiss the appeal. "The Honourable Madam Justice Huddart" I AGREE: "The Honourable Mr. Justice Hall" I AGREE:"The Honourable Mr. Justice Mackenzie"